Fremont County Solid Waste Disposal District (A Component Unit of Fremont County, Wyoming) Financial Report June 30, 2013

Transcription

1 Fremont County Solid Waste Disposal District (A Component Unit of Fremont County, Wyoming) Financial Report June 30, 2013

2 TABLE OF CONTENTS Page REPORT OF INDEPENDENT AUDITOR 1-2 MANAGEMENT'S DISCUSSION AND ANALYSIS 3-5 FINANCIAL STATEMENTS Statements of Net Position 6 Statements of Activities 7 Balance Sheets 8 Reconciliation of the Balance Sheets to the Statements of Net Position 8 Statements of Revenues, Expenditures and Changes in Fund Balance 9 Reconciliation of the Statements of Revenues, Expenditures and Changes in Fund Balance to the Statements of Activities 10 Notes to the Financial Statements REQUIRED SUPPLEMENTARY INFORMATION Budgetary Comparison Schedules 25 Note to Budgetary Comparison Schedules 26 OTHER SUPPLEMENTARY INFORMATION Schedule of Wyoming State Assistance 27 COMPLIANCE REPORTS Report on Internal Control over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance with Government Auditing Standards Schedule of Findings and Responses Status of Prior Year Findings 32 i

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5 Management s Discussion and Analysis For the Year Ended June 30, 2013 The Fremont County Solid Waste Disposal District is a Component Unit of Fremont County, Wyoming. The District is included in the County s Annual Financial Report. This discussion and analysis provides an overview of the District s financial activities for the fiscal year ended June 30, Financial Highlights As of June 30, 2013, the District s total assets were $10,829,900 and the total liabilities were $8,176,665. Included in the total liabilities is an estimate for future closure and post-closure care costs in the amount of $7,300,000. This estimate is based on estimated future costs adjusted for capacity used as of June 30, During fiscal year 2013, the District had total revenue of $6,017,815 and $4,498,083 of expense. The net position increased by $1,519,732 for the year ended June 30, 2013, Overview of the Financial Statements This discussion and analysis is intended to serve as an introduction to the District s basic financial statements. The District s basic financial statements are comprised of three components: 1) government-wide financial statements, 2) fund financial statements and 3) notes to the financial statements. The report also includes required supplementary information including the budgetary comparison schedules. Government-wide Financial Statements The government-wide financial statements present the results of the District s governmental activities using the accrual basis of accounting, which is the basis of accounting generally used by private sector businesses. The government-wide statements are on pages 6 and 7 of this report. Fund Financial Statements The fund financial statements are reported using the current financial resources measurement focus and the modified accrual basis of accounting. Revenues are recognized as soon as they are both measureable and available. Expenses are recorded when the liability is incurred with the exception of long-term debt and other long-term liabilities. The District recognizes the expense related to long-term debt and other long-term liabilities to the extent the liability has matured. The fund financial statements are on pages 8 through 10 of this report. Notes to the Financial Statements The notes to the financial statements provide additional information that is essential to understanding the data provided in the financial statements. The notes to the financial statements can be found on pages 11 through 24 of this report. Financial Summary and Analysis The tables on the following page provide condensed Statements of Net Position and condensed Statements of Activities as of and for the years ended June 30, 2013 and

6 Management s Discussion and Analysis, Continued For the Year Ended June 30, 2013 Condensed Statements of Net Position June 30, June 30, Change Favorable (Unfavorable) Current Assets $ 4,074,283 $ 3,424,559 $ 649,724 Noncurrent Assets 6,755,617 6,819,000 (63,383) Total Assets 10,829,900 10,243, ,341 Current Liabilities 519,001 1,348, ,145 Noncurrent Liabilities 7,657,664 7,761, ,246 Total Liabilities 8,176,665 9,110, ,391 Total Net Position $ 2, $ 1,133,503 1,519,732 The District was in the beginning stages of closing a portion of the Dubois landfill near the end of fiscal year The expenses associated with the closure are included in the current liabilities as of June 30, Condensed Statements of Activities Year Ended June 30, Year Ended June 30, Change Favorable (Unfavorable) Program Expenses $ (4,498,083) $ (6,649,446) $ 2,151,363 Program Revenues 2,598,391 2,784,538 (186,147) Net Program Expense (1,899,692) (3,864,908) 1,965,216 General Revenues Tax revenue 3,409,950 3,199, ,509 Other general revenue 9,474 59,292 (49,818) Total General Revenues 3,419,424 3,258, ,691 Increase (decrease) in Net Position $ 1, $ (606,175) $ 2,125,907 The decrease in program expenses from 2012 to 2013 was due primarily to the additional accrued landfill closure and post-closure care expenses recognized in Budgetary Highlights The District approves a budget annually in July of each year. The budget is prepared on the basis of accounting used for the fund financial statements and is submitted to the Fremont County Board of Commissioners for approval. There were no changes to the budget, after adoption, for the fiscal year ended June 30, The Budgetary Comparison Schedule can be found with the required supplementary information of these financial statements on page 25. 4

7 Management s Discussion and Analysis, Continued For the Year Ended June 30, 2013 Budgetary Highlights, Continued As part of the budgeting process, the District has committed a portion of the fund balance for future landfill closure and post-closure care costs. The District added $687,365 to the committed fund balance for the fiscal year ended June 30, The District receives property tax revenue from Fremont County to help fund the operations of landfills throughout the county. The assessed valuation for Fremont County is down approximately 11% for the budget year Capital Assets and Debt Administration The District s capital assets, net of depreciation, decreased $63,383. This decrease is the net result of an increase in assets in the amount of $532,313 and reduced by depreciation expense in the amount of $595,696. The District currently has three capital lease obligations for the lease of equipment with a total obligation of $493,090 as of June 30, The District made total payments of $170,824 during the fiscal year ended June 30, The total payments were comprised of $148,020 of principal payments and $22,804 of interest expense. Economic Factors The landfills in Fremont County accept municipal solid waste (MSW), construction and demolition waste (CDW) and other waste (biological and sump waste). The County is serviced by four landfills and twelve transfer stations. According to the annual capacity audits prepared for the District as of June 13, 2013, the waste received by service area follows: Service Area Tons of Waste Received Type of Waste Lander Area 14,160 tons MSW, CDW, other Riverton-Sand Draw 17,288 tons MSW, CDW, other Shoshoni, Lysite 233 tons CDW only Dubois, Crowheart 370 tons CDW only The MSW received from the sites accepting CDW only and the transfer stations is disposed at either the Riverton-Sand Draw or the Lander landfill. According to suburbanstats.org, the 2013 population of Fremont County is 40,123, which equates to nearly 1,600 pounds of waste per person disposed in our landfills for year ended June 30, Requests for Information The District s financial report is designed to present users with a general overview of the District s financial activity. Questions concerning this report or requests for additional information should be addressed to Fremont County Solid Waste Disposal District, PO Box 1400, 52 Beebee Road, Lander, Wyoming

8 STATEMENTS OF NET POSITION JUNE 30, 2013 AND ASSETS Current assets Cash and cash equivalents $ 3,604,365 $ 2,902,017 Receivables, net of allowance for uncollectable accounts Accounts receivable 204, ,386 Taxes receivable 34,000 58,000 Intergovernmental and grants receivable 27,123 75,470 Interest receivable 3,000 17,000 Prepaid expenses 34,574 33,186 Due from primary government 166, ,500 Total current assets 4,074,283 3,424,559 Noncurrent assets Nondepreciable capital assets 180, ,856 Depreciable capital assets, net of accumulated depreciation 6,574,761 6,638,144 Total assets 10,829,900 10,243,559 LIABILITIES Current liabilities Accounts payable and accrued expenses 170, ,843 Current portion of long-term liabilities 348,110 1,068,303 Total current liabilities 519,001 1,348,146 Noncurrent liabilities Compensated absences 194, ,103 Unearned revenue 18,299 - Obligations under capital leases 493, ,110 Closure and post-closure care 7,300,000 8,000,000 Less: current portion (348,110) (1,068,303) Total liabilities 8,176,665 9,110,056 NET POSITION Invested in capital assets net of related debt 6,262,527 6,177,890 Unrestricted (deficit) (3,609,292) (5,044,387) Total net position $ 2,653,235 $ 1,133,503 (The accompanying notes are an integral part of the basic financial statements.) -6-

9 STATEMENTS OF ACTIVITIES FOR THE YEARS ENDED JUNE 30, 2013 AND Program expenses Wages $ 1,551,144 $ 1,609,674 Employee benefits 778, ,288 Bale station operation and maintenance 162,626 91,550 Engineering fees 242, ,637 Equipment repairs 118,354 88,739 Financial assurance 1,822 7,507 Grant expenses (except capital outlay) 25,414 6,809 Insurance 39,371 38,962 Interest 22,804 15,729 Landfill closure and post-closure care costs 44,808 2,035,000 Leases 41,522 52,809 Office expenses and travel 39,837 37,026 Bad debts 5,875 5,774 Operation and maintenance 287, ,858 Professional fees 67,819 86,073 Recycling 169, ,609 Scale houses 10,027 8,624 Site improvements and maintenance 115, ,924 Supplies 7,325 9,654 Transfer stations 2, Utilities 169, ,790 Depreciation 595, ,920 Total program expenses 4,498,083 6,649,446 Program revenues Charges for services 2,521,005 2,564,878 Operating grants and contributions 14,276 25,003 Capital grants and contributions 63, ,657 Total program revenues 2,598,391 2,784,538 Net program expense (1,899,692) (3,864,908) General revenues Taxes, primarily property 3,409,950 3,199,441 Investment income 1, Gain on disposition of assets 7,161 37,603 Miscellaneous income 1,015 20,819 Total general revenues 3,419,424 3,258,733 Increase (decrease) in net position 1,519,732 (606,175) Net position - beginning of year 1,133,503 1,739,678 Net position - end of year $ 2,653,235 $ 1,133,503 (The accompanying notes are an integral part of the basic financial statements.) -7-

10 BALANCE SHEETS JUNE 30, 2013 AND ASSETS Cash and cash equivalents $ 3,604,365 $ 2,902,017 Receivables, net of allowance for uncollectible accounts Accounts receivable 204, ,386 Taxes receivable 34,000 58,000 Intergovernmental and grants receivable - 37,209 Interest receivable 3,000 17,000 Prepaid expenses 34,574 33,186 Due from primary government 166, ,500 Total assets $ 4,047,160 $ 3,386,298 LIABILITIES AND FUND BALANCE Liabilities Accounts payable and accrued expenses $ 170,891 $ 279,843 Deferred property taxes receivable 37,000 75,000 Unearned revenue 18,299 - Total liabilities 226, ,843 Fund balance Nonspendable prepaid expenses 34,574 33,186 Committed for cash reserves 300, ,000 Committed for closure and post-closure care obligations 1,592, ,706 Unassigned 1,894,325 1,793,563 Total fund balance 3,820,970 3,031,455 Total liabilities and fund balance $ 4,047,160 $ 3,386,298 Reconciliation of the Balance Sheets to the Statements of Net Position Fund balance of Fremont County Solid Waste Disposal District $ 3,820,970 $ 3,031,455 Amounts reported for Fremont County Solid Waste Disposal District in the statement of net position are different because: 1) Capital assets are not financial resources, and therefore, are not reported in the fund financial statements. 6,755,617 6,819,000 2) Certain intergovernmental receivables are not available to pay current-period expenditures and, therefore, are deferred in the fund financial statements. 27,123 38,261 3) Property tax revenue that will be collected after year-end, but which is not available soon enough after year-end to pay for the current period's expenditures, is deferred in the governmental fund financial statements. 37,000 75,000 4) Long-term liabilities, including compensated absences, closure and post-closure care costs and capital leases, are not due in the current period and, therefore, are not reported in the governmental fund financial statements. (7,987,475) (8,830,213) Net position of Fremont County Solid Waste Disposal District (page 6) $ 2,653,235 $ 1,133,503 0 (The accompanying notes are an integral part of the basic financial statements.) -8-

11 STATEMENTS OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE FOR THE YEARS ENDED JUNE 30, 2013 AND Revenues Taxes, primarily property $ 3,447,950 $ 3,171,441 Intergovernmental 88, ,448 Charges for services 2,521,005 2,564,878 Investment income 1, Miscellaneous income 1,015 20,819 Total revenues 6,059,792 5,977,456 Expenditures Wages 1,545,862 1,591,874 Employee benefits 778, ,288 Bale station operation and maintenance 162,626 91,550 Engineering fees 242, ,637 Equipment repairs 118,354 88,739 Financial assurance 1,822 7,507 Grant expenses (except capital outlay) 25,414 6,809 Insurance 39,371 38,962 Landfill closure and post-closure care costs 744,808 35,000 Leases 41,522 52,809 Office expenses and travel 39,837 37,026 Bad debt expense 5,875 5,774 Operation and maintenance 287, ,858 Professional fees 67,819 86,073 Recycling 169, ,609 Scale houses 10,027 8,624 Site improvements and maintenance 115, ,924 Supplies 7,325 9,654 Transfer stations 2, Utilities 169, ,790 Capital outlay 532, ,853 Debt service Principal 148,020 92,172 Interest 22,804 15,729 Total expenditures 5,277,438 5,135,751 Excess of revenues over expenditures 782, ,705 Other financing sources: Proceeds from capital leases - 342,211 Proceeds from sale of capital assets 7,161 37,603 Total other financing sources 7, ,814 Net change in fund balance 789,515 1,221,519 Fund balance - beginning of year 3,031,455 1,809,936 Fund balance - ending of year $ 3,820,970 $ 3,031,455 (The accompanying notes are an integral part of the basic financial statements.) -9-

12 RECONCILIATION OF THE STATEMENTS OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE TO THE STATEMENTS OF ACTIVITIES FOR THE YEARS ENDED JUNE 30, 2013 AND 2012 Amounts reported in the Statements of Activities are different because: Net change in fund balance (page 9) $ 789,515 $ 1,221,519 Governmental funds report capital outlays as expenditures. However, in the Statements of Activities, the cost of those assets is allocated over their estimated useful lives and reported as depreciation expense. This amount is the difference between depreciation expense ($595,696) and capital outlay ($532,313) in fiscal 2013; and depreciation expense ($497,920) and capital outlay ($909,853) in fiscal (63,383) 411,933 Revenues in the Statements of Activities that do not provide current financial resources are not reported as revenues in the governmental fund financial statements. (49,138) 28,212 Expenses reported in the Statements of Activities that do not use current financial resources are not reported as expenditures in the funds. The following are net decreases (increases) in: Compensated absences (5,282) (17,800) Landfill closure and post-closure care costs 700,000 (2,000,000) The issuance of long-term debt (including capital leases) provides current financial resources to governmental funds, while the repayment of long-term debt consumes the current financial resources of governmental funds. However, this has no effect on net assets. This amount is the net effect of these differences in the treatment of long-term debt. 148,020 (250,039) Change in net position (page 7) $ 1,519,732 $ (606,175) (The accompanying notes are an integral part of the basic financial statements.) -10-

13 NOTES TO THE FINANCIAL STATEMENTS NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The financial statements of Fremont County Solid Waste Disposal District (the District) have been prepared in conformity with accounting principles generally accepted in the United States of America (GAAP) as applied to governmental units. The Governmental Accounting Standards Board (GASB) is the accepted standard-setting body for establishing governmental accounting and financial reporting principles. Significant District accounting policies are described below. 1-A Reporting Entity The District was created October 3, 1979, under the authority of Wyoming Statute for the operation and maintenance of solid waste sanitary landfills in Fremont County. The District can levy up to three mills for the purpose of disposing of solid waste. The District is considered a component unit of Fremont County, Wyoming (the County), because the County Commissioners appoint the board members for the District, and because the District is financially dependent upon the approval of funding outlined in an annual budget submitted to the County Commissioners. Thus, the District is included as a discretely presented component unit in the financial report of Fremont County, Wyoming. A copy of the audited financial statements for Fremont County, Wyoming, for the year ended June 30, 2013, may be obtained at the Fremont County courthouse or at The accompanying financial statements present the financial information of the District only. The District has no oversight responsibility for any other governmental entity since no other entities are considered to be controlled by or dependent upon the District. Control or dependence is determined on the basis of budget adoption, taxing authority, funding, and appointment of the respective governing board. 1-B Government Wide and Fund Financial Statements The management s discussion and analysis introduces the basic financial statements and provides an analytical overview of the District s financial activities in a narrative format. An analysis of the District s overall financial position and results of operations is included to assist users in assessing whether the financial position has improved or deteriorated as a result of the year s activities. The District uses government-wide financial statements, including the Statement of Net Position and Statement of Activities, to report its financial position and results of operations, respectively. The Statement of Activities demonstrates the degree to which the expenses are offset by program revenues. Program revenues include (1) charges to customers or applicants who purchase, use, or directly benefit from goods, services, or privileges provided and (2) grants and contributions that are restricted to meeting the operational or capital requirements of a particular function or segment. Taxes and other items not properly included among program revenues are reported instead as general revenues. Fund financial statements also report financial information about the District using a different basis of accounting as explained below. 11

14 NOTES TO THE FINANCIAL STATEMENTS (cont.) NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont.) 1-C Measurement Focus, Basis of Accounting and Financial Statement Presentation Government-Wide Financial Statements The government-wide financial statements are reported using the economic resources measurement focus and the accrual basis of accounting. Under the accrual basis, revenues are recorded when earned and expenses are recorded when a liability is incurred, regardless of the timing of related cash flows. Nonexchange transactions, in which the District gives (or receives) value without directly receiving (or giving) equal value in exchange, include property taxes, grants and entitlements. Property taxes are recognized as revenues in the year for which they are levied. Grants and similar items are recognized as revenue as soon as all eligibility requirements imposed by the provider have been met. Fund Financial Statements Governmental fund financial statements are reported using the current financial resources measurement focus and the modified accrual basis of accounting. Revenues are recognized as soon as they are both measurable and available. Revenues are considered to be measurable when the amount of the transaction can be determined and available when they are collected within the current period or soon enough thereafter to pay liabilities of the current period. For this purpose, the District considers revenues to be available if they are collected as of the financial statement date. The remaining receivables have been classified as deferred revenues and will be recognized as revenue in the period of the actual receipt. Expenditures are recorded when the related fund liability is incurred, except for principal and interest on long-term debt, claims, judgments and compensated absences, which are recognized to the extent they have matured. General capital asset acquisitions are reported as expenditures in the governmental fund. Proceeds from long-term debt and acquisitions under capital leases are reported as other financing sources. Property taxes, other taxes, licenses, and interest associated with the current fiscal period are all considered to be susceptible to accrual and have been recognized as revenues of the current fiscal period. All other revenue items are considered to be measurable and available only when cash is received by the District. The District applies expenses to restricted resources when an expense is incurred for purposes for which both restricted and unrestricted net assets are available. 12

15 NOTES TO THE FINANCIAL STATEMENTS (cont.) NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont.) 1-D Recent Accounting Pronouncements The financial statements of the District have been prepared in conformity with accounting principles generally accepted in the United States of America (GAAP) as applied to local government units. The Governmental Accounting Standards Board (GASB) is the accepted standard-setting body for establishing governmental accounting and financial reporting principles and standards. The District has adopted and applied all applicable GASB pronouncements, including GASB Statement No. 62, Codification of Accounting and Financial Reporting Guidance Contained in Pre-November 30, 1989 FASB and AICPA Pronouncements. GASB Statement No. 60, Accounting and Financial Reporting for Service Concession Arrangements; GASB Statement No. 62; GASB Statement No. 63, Financial Reporting of Deferred Outflows of Resources, Deferred Inflows of Resources and Net Position; and GASB Statement No. 64, Derivative Instruments: Application of Hedge Accounting Termination Provisions an amendment of GASB 53, were all effective for the District beginning in the fiscal year ended June 30, Implementation of these statements did not have a material impact on the District s financial results. GASB Statement No. 63 amends the current net assets reporting requirements by incorporating deferred inflows of resources and deferred outflows of resources into the definitions of required financial statement components and renames Net Assets as Net Position. The District s financial statements have been modified to conform to the requirements of this statement. Implementation did not have a material impact on the District s financial results. In March 2012, the GASB issued Statement No. 65, Items Previously Reported as Assets and Liabilities. GASB Statement No. 65 establishes accounting and financial reporting standards that reclassify certain items previously reported as assets and liabilities as deferred outflows or deferred inflows of resources or as outflows or inflows of resources. This statement also limits the use of the term deferred in financial statement presentations. This statement will be effective for the District beginning in the fiscal year ending June 30, The District is currently assessing the financial statement impact of adopting this statement. In June 2012, the GASB issued Statement No. 68, Accounting and Financial Reporting for Pensions An Amendment of GASB Statement No. 27. The primary objective of GASB Statement No. 68 is to improve accounting and financial reporting by state and local governments for pensions. This statement establishes standards for measuring and recognizing liabilities, deferred outflows and deferred inflows of resources and expenses. For defined benefit pension plans, this statement identifies the methods and assumptions that should be used to project benefit payments, discount projected benefit payments to their actuarial present value and attribute that present value to periods of employee service. Note disclosure and required supplementary information about pensions are also addressed. GASB Statement No. 68 will be effective for the District beginning in the fiscal year ending June 30, The District is currently evaluating the financial statement impact of adopting this statement. 1-E Cash and Cash Equivalents The District considers cash and cash equivalents to consist of all cash, either on hand or in banks, including time deposits and any highly liquid debt instruments with a maturity of three months or less when purchased. 13

16 NOTES TO THE FINANCIAL STATEMENTS (cont.) NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont.) 1-F Receivables Receivables for property taxes and the related interest receivable shown on the governmental fund financial statements are those for which payment was not received by the financial statement date, but are due prior to the fiscal year end and are expected to be collected after year end. All receivables for property taxes, regardless of when they are collected are recognized as revenue in the government-wide financial statements. Accounts receivable for landfill user fees are recorded and recognized as revenue as of the service date for both the governmental fund financial statements and the government-wide financial statements. 1-G Capital Assets Capitalization and Valuation Capital assets, including property, plant, equipment, and infrastructure assets (e.g., roads, bridges, curbs and gutters, streets and sidewalks, drainage systems, and lighting systems), are reported as noncurrent assets in the government-wide financial statements and as expenditures in the governmental fund financial statements. Infrastructure assets with initial costs that equal or exceed $25,000 are capitalized. Expenditures for buildings and improvements having a useful life greater than five years and a value greater than $10,000 are capitalized. Expenditures for other capital items having a useful life greater than one year and a value greater than $1,000 are also capitalized. Individual items having a lesser value may be capitalized if they are purchased in a group. Costs of routine repairs and maintenance that do not improve or extend the useful lives of the related assets are not capitalized. Capital assets are recorded at historical cost or estimated historical cost if purchased or constructed. Donated capital assets are recorded at estimated fair market value at the date of donation. Major outlays for capital assets and improvements are capitalized as projects are constructed. Interest incurred during the construction phase of capital projects is included as part of the capitalized value of the assets constructed. Depreciation Method and Useful Lives Capital assets are depreciated using the straight-line method over the following estimated useful lives: Buildings and improvements Equipment Vehicles Computer software Office furniture Infrastructure years 3-30 years 3-15 years 5 years 5-10 years 3-50 years When capital assets are sold or otherwise disposed of, the cost and associated accumulated depreciation are removed from the respective accounts, and the resulting gain or loss is recorded in the Statement of Activities. 14

17 NOTES TO THE FINANCIAL STATEMENTS (cont.) NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont.) 1-H Compensated Absences District policy permits employees to accumulate a limited amount of earned, but unused vacation and sick leave. These benefits are payable to employees upon separation from service. No liability is recorded for non-vesting accumulated sick leave rights to receive sick pay. Accumulated sick leave and vacation that has become due and payable at the end of the fiscal year, which is expected to be paid during the upcoming fiscal year, is reported as an expenditure and fund liability of the governmental fund in the fund s financial statement that will pay it. Accumulated sick leave and vacation that is expected to be utilized by employees during the upcoming fiscal year is reported as a current obligation in the government-wide financial statements. Accumulated sick leave and vacation leave that is not expected to be utilized by employees during the upcoming fiscal year is reported as a noncurrent obligation in the government-wide financial statements. 1-I Accrued Liabilities and Long-Term Obligations Liabilities shown on the fund financial statements are those that have become due and payable at the end of the fiscal year, which are expected to be paid during the upcoming fiscal year, and are reported as an expenditure and fund liability of the governmental fund that will pay it. On the government-wide financial statements, liabilities that become due and payable within one year after the financial statement date are included in current liabilities, while liabilities that become due and payable after that time are shown as noncurrent liabilities. 1-J Encumbrances Encumbrance accounting, under which purchase orders, contracts, and other commitments for the expenditure of funds are recorded in order to reserve that portion of the applicable appropriation, is employed as an extension of formal budgetary integration. Encumbrances outstanding, if any, at year end are reported as committed or assigned fund balance since they do not constitute expenditures or liabilities. At June 30, 2013, there were no outstanding encumbrances. 1-K Net Position Net position represents the difference between assets plus deferred outflows and liabilities plus deferred inflows. Net position is comprised of the various net earnings from operating income, nonoperating revenues and expenses, and capital contributions. Net position is classified in the following components. Invested in capital assets, net of related debt This component of net position consists of capital assets, net of accumulated depreciation and reduced by the outstanding balances of any bonds, mortgages, notes or other borrowings that are attributable to the acquisition, construction or improvement of those assets. Restricted net position This component of net position consists of net position subject to constraints imposed by creditors (such as through debt covenants), grantors, contributors, or laws or regulations of other governments or constraints imposed by law through constitutional provisions or enabling legislation. The District had no restricted net position as of June 30, 2013 or June 30, Unrestricted net position This component of net position consists of net position that does not meet the definition of invested in capital assets, net of related debt or restricted net position. 15

18 NOTES TO THE FINANCIAL STATEMENTS (cont.) NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont.) 1-L Fund Balance In March 2009, the GASB issued Statement No. 54, Fund Balance Reporting and Government Fund Type Definitions (GASB No. 54). This Statement defines the different types of fund balances that a governmental entity must use for financial reporting purposes. GASB No. 54, which became effective for fiscal years beginning after June 15, 2010, requires the fund balance amounts to be properly reported within one of the following fund balance classifications: Nonspendable: The portion of fund balance that is not expected to be converted to cash, such as inventories and prepaid expenses, if any; Restricted: The portion of fund balance that can be spent only for the specific purposes stipulated by constitution, external resource providers, or through enabling legislation; Committed: The portion of fund balance that can be used only for the specific purposes determined by a formal action of the District s Board of Directors (the District s highest level of decision-making authority); Assigned: The portion of fund balance that is intended to be used by the District for specific purposes, but which does not meet the criteria to be classified as restricted or committed; and Unassigned: The residual portion of fund balance for the District s General Fund and includes all spendable amounts not included in the other classifications. The District s policy is to apply expenditures against nonspendable fund balance, restricted fund balance, committed fund balance, assigned fund balance, and unassigned fund balance at the end of the fiscal year. First, nonspendable fund balances are determined. Then, restricted fund balances for specific purposes are determined (not including nonspendable amounts). Then, any remaining fund balance amounts for governmental funds other than the General Fund are classified as restricted fund balance. It is possible for the governmental funds other than the General Fund to have negative unassigned fund balances when nonspendable amounts plus the restricted fund balances for specific purposes amounts exceed the positive fund balance for the governmental funds other than the General Fund. 1-M Grants and Intergovernmental Revenue The District receives financial assistance from governmental agencies in the form of grants and revenue in lieu of tax revenue on exempt property. Revenue is deemed earned and thus recognized when applicable program expenditures are recorded. Funds received but not earned as of the fiscal year end are recorded as unearned revenue. 16

19 NOTES TO THE FINANCIAL STATEMENTS (cont.) NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont.) 1-N Subsequent Events The District has evaluated subsequent events through October 18, 2013, the date as of which these financial statements were available to be issued. No material subsequent events have occurred since June 30, 2013 that required recognition or disclosure in these financial statements, except as disclosed in Note 12, Subsequent Events. 1-O Estimates The preparation of financial statements in accordance with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the amounts reported in the financial statements and related disclosures. Actual results could differ from those estimates and affect the amounts reported in the financial statements. NOTE 2. STEWARDSHIP, COMPLIANCE AND ACCOUNTABILITY 2-A Budgets and Budgetary Accounting The District is required to adhere to the County s budget process. The County follows these procedures in establishing the budgetary data reflected in the financial statements: Prior to May 15, the County Clerk submits a proposed operating budget to the County Commissioners for the upcoming fiscal year commencing that July 1. The operating budget includes proposed expenditures and the means of financing them for the upcoming year, along with estimates for the current year and actual data for the two preceding years. The County Charter requires that the budget be submitted in summary form. In addition, more detailed line item budgets are included for administrative control. The legal level of statutory control for the detailed budget is at the department/function level. Public hearings are conducted between the second and the third Monday in July to obtain taxpayer comments. Within 24 hours following the public hearing, the budget is legally adopted through passage of a resolution. The District may, after public notice and hearing, amend the budget. The budget for the District is adopted on a basis consistent with generally accepted accounting principles (GAAP), except that encumbrances are included as expenditures. All appropriations lapse at the end of each fiscal year. 2-B Budgetary Comparison Schedules The budgetary comparison schedules are presented as required supplementary information to demonstrate whether resources were obtained and used in accordance with the District s legally adopted budgets. The budget amounts are the original and final authorized amounts. Encumbrances are included with expenditures to determine statutory compliance. 17

20 NOTES TO THE FINANCIAL STATEMENTS (cont.) NOTE 3. CASH AND CASH EQUIVALENTS Statutes authorize the District to invest in various instruments of the federal government and its agencies, savings certificates of savings and loan associations, bank certificates of deposit, and investment pools that purchase allowable investments. The composition of cash and cash equivalents in the financial statements is as follows as of June 30, 2013 and 2012: Cash on hand $ 8,223 $ 8,693 Bank deposits 3,596,142 2,893,324 Total cash and cash equivalents $ 3,604,365 $ 2,902,017 Custodial credit risk is the risk that in the event of a bank failure, the District s deposits may not be returned to it. Wyoming statute requires the District to collateralize bank deposits that exceed amounts insured by the Federal Deposit Insurance Corporation (FDIC). In addition, for collateral held by a custodian other than the Federal Reserve, an approved Joint Custody Receipt form must be properly executed to perfect the District's interest in collateral pledged by depository financial institutions. The District s superintendent monitors cash account balances to see that sufficient collateral is pledged to the District. At June 30, 2013, the District s deposits were insured by the FDIC up to $250,000 at each bank. At June 30, 2013, the carrying amount of the District's bank deposits was $3,596,142 and the bank balance was $3,684,380. Of the bank balance, $462,558 was covered by federal depository insurance and $3,221,822 was covered by collateral held in safekeeping by a third-party trust. NOTE 4. RECEIVABLES Receivables have been reported net of the allowance for uncollectible accounts. The allowance is estimated based on prior experience. The allowances for uncollectible accounts are as follows as of June 30, 2013 and 2012: NOTE 5. PROPERTY TAXES Accounts receivable $ 9,700 $ 3,825 Taxes and interest receivable 13,000 18,000 $ 22,700 $ 21,825 The Fremont County Treasurer is responsible for collecting property taxes levied by the District and approved by the Fremont County Board of County Commissioners. Taxes are levied by October 10. Provided the payments are timely, the tax can be paid in two equal installments on November 10 and May 10 or tax may be paid in full on December 31. Any taxes on real property that have not been received by the due date are put before the general public for a tax deed assignment sale in August following three publicly advertised notices of the date of this sale. Taxes that are not received at this assignment sale will cause the respective property to be assigned to the County. 18

21 NOTE 6. CAPITAL ASSETS NOTES TO THE FINANCIAL STATEMENTS (cont.) Capital asset activity for the fiscal year ended June 30, 2013 is as follows: Balance June 30, 2012 Additions Disposals Balance June 30, 2013 Non-depreciable Capital Assets Land $ 180,856 $ 0 $ 0 $ 180,856 Construction in progress Total non-depreciable 180, ,856 Depreciable Capital Assets Buildings and improvements 4,051,791 30, ,082,401 Equipment 3,816, , ,103,029 Vehicles 1,102, ,790 (15,722) 1,301,123 Computer software 26, ,343 Office furniture 9, ,441 Infrastructure 1,391, ,391,348 Total depreciable 10,397, ,313 (15,722) 10,913,685 Accumulated Depreciation Buildings and improvements 876, , ,037 Equipment 1,872, , ,199,513 Vehicles 677, ,410 (15,722) 773,557 Computer software 13,613 5, ,882 Office furniture 7, ,849 Infrastructure 310,536 34, ,086 Total accumulated depreciation 3,758, ,696 (15,722) 4,338,924 Depreciable capital assets net 6,638,144 6,574,761 Governmental activities capital assets - net $ 6,819,000 $ (63,383) $ 0 $ 6,755,617 19

22 NOTE 6. CAPITAL ASSETS (cont.) NOTES TO THE FINANCIAL STATEMENTS (cont.) Capital asset activity for the fiscal year ended June 30, 2012 is as follows: Balance June 30, 2011 Additions Transfers Disposals Balance June 30, 2012 Non-depreciable Capital Assets Land $ 180,856 $ 0 $ 0 $ 0 $ 180,856 Construction in progress 339,523 0 (339,523) 0 0 Total non-depreciable 520,379 0 (339,523) 0 180,856 Depreciable Capital Assets Buildings and improvements 3,795, , , ,051,791 Equipment 3,529, , ,565 3,816,116 Vehicles 905, , ,707 1,102,055 Computer software 26, ,343 Office furniture 9, ,441 Infrastructure 1,144,885 46, , ,391,348 Total depreciable 9,410, , , ,272 10,397,094 Accumulated Depreciation Buildings and improvements 771, , ,878 Equipment 1,751, , ,565 1,872,486 Vehicles 704,452 78, , ,869 Computer software 8,344 5, ,613 Office furniture 7, ,568 Infrastructure 281,386 29, ,536 Total accumulated depreciation 3,524, , ,272 3,758,950 Depreciable capital assets - net 5,886,688 6,638,144 Governmental activities capital assets - net $ 6,407,067 $ 411,933 $. 0 $ 0 $ 6,819,000 NOTE 7. CHANGES IN LONG-TERM LIABILITIES The following is a summary of the changes in long-term liabilities of the District for the year ended June 30, 2013 and 2012: Balance June 30, 2012 Additions Reductions Balance June 30, 2013 Due Within One Year Compensated absences $ 189,103 $ 187,315 $ 182,033 $ 194,385 $ 194,385 Obligations under capital lease 641, , , ,725 Closure and post-closure care 8,000,000 44, ,808 7,300,000 0 $ 8,830,213 $ 232,123 $ 1,074,861 $ 7,987,475 $ 348,110 Balance June 30, 2011 Additions Reductions Balance June 30, 2012 Due Within One Year Compensated absences $ 171,303 $ 223,470 $ 205,670 $ 189,103 $ 189,103 Obligations under capital lease 391, ,211 92, , ,020 Closure and post-closure care 6,000,000 2,035,000 35,000 8,000, ,180 $ 6,562,374 $2,600,681 $ 332,842 $ 8,830,213 $1,068,303 20

23 NOTE 8. LEASING ARRANGEMENTS NOTES TO THE FINANCIAL STATEMENTS (cont.) The District has entered into leases for equipment which provide for specified minimum rental payments. To comply with state statutes, all leases contain a nonappropriations clause which allows the lessee to cancel the lease in the event that resources are not available for future appropriation. The remaining terms of the leases range from approximately one to four years. Leases which transfer substantially all the benefits and risks incident to the ownership of property have been capitalized. The future minimum rental commitments as of June 30, 2013, for continuing capital leases are as follows: Year Ending June 30, 2014 $ 170, , , ,102 Total minimum lease payments 531,130 Less: Amounts representing interest 38,040 Present value of minimum lease payments $ 493,090 Cost of leased property $ 1,003,463 Less: Accumulated amortization 328,484 $ 674,979 Capital lease obligations payable in future years have been reflected as both proceeds from capital leases and as expenditures in the initial year of the lease in the fund financial statements. Amortization of leased equipment under capital assets is included with depreciation expense in the government-wide financial statement. NOTE 9. DEFINED BENEFIT PENSION PLAN The District participates in the Wyoming Retirement System ( System ), a statewide cost-sharing, multiple-employer public employee retirement system administered by the State of Wyoming Retirement System Board. Substantially all of the District s fulltime employees are eligible to participate. The System provides retirement, disability and death benefits according to predetermined formulas. Benefits are established by Title 9, Chapter 3 of the Wyoming Statutes. The System issues a publicly available financial report which includes audited financial statements and required supplementary information for the System. The report may be obtained by writing to the Wyoming Retirement System, First Floor East, Herschler Building, 122 West 25 th Street, Cheyenne, Wyoming Plan members are required to contribute 7.0% of their annual covered salary and the District is required to contribute 7.12% of the annual covered payroll. Legislation enacted in 1979 allows the employer to pay any or all of the employees contributions in addition to the matching contributions. The District currently pays 100% of the required employees contributions. Contribution rates are established by Title 9, Chapter 3 of the Wyoming Statutes. The District made the required contributions to the System for the years ended June 30, 2013, 2012, and 2011 in the amounts $208,565, $204,252, and $198,460 respectively. 21

24 NOTES TO THE FINANCIAL STATEMENTS (cont.) NOTE 10. COMMITMENTS AND CONTINGENCIES Litigation Various claims and lawsuits arising in the ordinary course of operations may be pending against the District. While the ultimate effect of such litigation cannot be ascertained at this time, in the opinion of the District s Attorney, the liabilities which may arise from such action would not result in losses which would materially affect the financial position of the District or the results of its operations. Insurance Coverage The District is a member of the Local Government Liability Pool as authorized by State statute Coverage of this pool includes general liability and public officials errors and omissions. Participation by the District is voluntary. Participants may be terminated for failure to pay the required assessments. A joint powers board administers the pool. It is the board s duty to provide legal services for the defense of claims, procure insurance and professional services as required, establish and collect assessments on participating entities as necessary to operate the pool, and establish deductibles. Separate insurance coverage is maintained for property and vehicles. Settled claims have not exceeded the insurance coverage in the past three years. No significant reduction in the District s insurance coverage has occurred. Group Health Insurance The District participates in the County s self-insured health benefit plan. The purpose of this plan is to pay medical, dental and vision claims of County and other qualifying entities employees and their covered dependents, and minimize the total cost of medical benefits. Medical claims exceeding $125,000 per individual are covered by a stop-loss policy through a private insurance carrier. The County has engaged the services of a plan administrator who, for an administration fee, services the claims and stop-loss premiums paid. Settled claims have not exceeded the stop-loss insurance limits in any of the past ten years. The health insurance plan is funded by monthly contribution payments from the participating groups. For the years ended June 30, 2013 and 2012, the District made contributions of $409,330 and $388,126, respectively, to the health insurance plan on behalf of its covered employees. The District also offers a self-funded death benefit to employees as a fringe benefit. The maximum death benefit is $10,000 per employee. NOTE 11. CLOSURE AND POST-CLOSURE CARE COST State and federal laws and regulations require the District to place a final cover on its landfills when it stops accepting waste and to perform certain maintenance and monitoring functions at the sites for at least 30 years after closure. After five years, the District can petition the State for official closure status. Closure and post-closure care costs will be paid only near or after the date that the landfills stop accepting waste. The estimated liability incurred to date is included as a liability of the District in the government-wide Statement of Net Position. Closure and post-closure care costs are recognized when incurred. The liability is adjusted each year to reflect costs incurred and changes in estimated remaining landfill capacity. The District estimates closure and post-closure care costs based on original landfill capacity and the estimated capacity used to date. 22

25 NOTES TO THE FINANCIAL STATEMENTS (cont.) NOTE 11. CLOSURE AND POSTCLOSURE-CARE COST (cont.) The landfill closure and post-closure care liability reported is based on the following estimated costs and capacities: June 30, Estimated Total Closure and Post-closure Care Costs Percentage of Total Capacity Used Liability 2013 $ 12,200,000 ~60% $ 7,300,000 These costs are based on what it would presently cost to perform all closure and postclosure care. Actual costs may be more or less due to inflation, changes in technology or changes in regulations. The District estimates the remaining site life and capacity for each of the County s landfills to be as follows as of June 30, 2013: Remaining Site Life Capacity Used Lander Phases years 71 % Riverton Sand Draw Shoshoni 19 years 117 years 57 % 66 % Dubois Expansion 78.years 1 % State and federal laws require the District to provide financial assurance that the closure and post-closure care requirements will be met. The District participates in a guarantee program administered by the State of Wyoming. Participation in this program satisfies the financial assurance requirements. The effective date of compliance with these requirements was April 9, The annual contributions amounted to $1,822 and $7,507, for the years ended June 30, 2013 and 2012, respectively. The landfills are required to be re-permitted by the Wyoming Department of Environmental Quality (WDEQ) every four years. The permitting process was completed for all four sites during the fiscal year ended June 30, The operating permits were issued as follows: Dubois, issued August 23, 2011; Lander, issued January 5, 2012; Shoshoni, issued March 29, 2012; and Sand Draw, issued April 23, The District has closed six sites. The State of Wyoming has assumed control over three small landfills within Fremont County (Atlantic City, Jeffrey City and Lysite), releasing the District of post-closure responsibilities and decreasing the amount of liability recognized by the District. There are outstanding issues on the remaining three closed sites (Hudson, Pavillion and Missouri Valley). Annual inspections have revealed problems that must be addressed before the District can petition the State for final closure. The State requires five consecutive annual inspections without incident before the petition for release can be accepted. 23

26 NOTE 12. SUBSEQUENT EVENTS NOTES TO THE FINANCIAL STATEMENTS (cont.) The District terminated the previous contract to provide services on the Wind River Indian Reservation, effective December 15, The District and the Wind River Indian Reservation agreed to an interim operating agreement for the period of December 16, 2012 through July 14, The entities have entered into a new operating agreement, effective July, 15, NOTE 13. RELATED PARTIES The District has a Memorandum of Understanding with Community Entry Services (CES) to advance the net proceeds of certain recycled products in exchange for sorting and monitoring delivery of recycle materials. One of the current Board members of the District is employed by CES. 24

27 Required Supplementary Information

28 BUDGETARY COMPARISON SCHEDULES FOR THE YEARS ENDED JUNE 30, 2013 AND Budget Actual Variance Budget Actual Variance Original/ (Budgetary Basis) Favorable Original/ (Budgetary Basis) Favorable Final (Note 2) (Unfavorable) Final (Note 2) (Unfavorable) BUDGETARY FUND BALANCE - $ 667,929 $ 3,031,455 $ 2,363,526 $ 154,814 $ 1,809,936 $ 1,655,122 RESOURCES (INFLOWS) Taxes, primarily property 3,374,668 3,447,950 73,282 3,191,456 3,171,441 (20,015) Intergovernmental 259,068 88,524 (170,544) 543, ,448 (324,121) Charges for services 2,610,000 2,521,005 (88,995) 2,453,383 2,564, ,495 Investment income 625 1, Miscellaneous income 0 1,015 1, ,819 20,819 Proceeds from capital leases , ,211 Sale of capital assets 0 7,161 7, ,603 37,603 Amount available for appropriations 6,912,290 9,098,408 2,186,118 6,343,222 8,167,206 1,823,984 CHARGES TO APPROPRIATIONS (OUTFLOWS) Current Wages 1,797,000 1,545, ,138 1,842,451 1,591, ,577 Employee benefits 925, , , , , ,927 Bale station operation and maintenance 192, ,626 29, ,000 91, ,450 Engineering fees 375, , , , ,637 (43,637) Equipment repairs 235, , , ,000 88, ,261 Financial assurance 10,000 1,822 8,178 7,000 7,507 (507) Grant expenses (except capital outlay) 527,294 25, , ,809 (6,809) Insurance 41,150 39,371 1,779 38,145 38,962 (817) Landfill closure and post-closure care costs 760, ,808 15, ,000 (35,000) Leases 60,000 41,522 18, ,809 (52,759) Long-term plan 5, ,000 40, ,000 Office expenses and travel 41,500 39,837 1,663 65,800 37,026 28,774 Bad debt expense 0 5,875 (5,875) 0 5,774 (5,774) Operation and maintenance 480, , , , ,858 (24,858) Professional fees 112,500 67,819 44, ,000 86,073 99,927 Recycling 160, ,029 (9,029) 130, ,609 (14,609) Scale houses 10,000 10,027 (27) 10,000 8,624 1,376 Site improvements and maintenance 169, ,435 54, , ,924 21,076 Supplies 8,000 7, ,500 9,654 (2,154) Transfer stations 40,001 2,010 37, , ,110 Utilities 225, ,232 55, , ,790 9,210 Capital outlay 567, ,313 35,187 1,324, , ,608 Debt service Principal 148, , ,172 (92,172) Interest 22,825 22, ,729 (15,729) Total charges to appropriations 6,912,290 5,277,438 $ 1,634,852 6,343,222 5,135,751 $ 1,207,471 BUDGETARY FUND BALANCE - ENDING $ 0 $ 3,820,970 $ 0 $ 3,031,455 Reconciliation of total charges to appropriations - actual (budgetary basis) to total expenditures Total charges to Appropriations - Actual (budgetary basis, as above) $ 5,277,438 $ 5,135,751 Encumbrances are not reported as expenditures on the Statement of Revenues, Expenditures, and Changes in Fund Balance. 0 0 Total expenditures (GAAP Basis) (page 9) $ 5,277,438 $ 5,135,751 (The accompanying note to the required supplementary information is an integral part of this schedule.) -25-

29 NOTE TO BUDGETARY COMPARISON SCHEDULES NOTE A - BUDGETARY ACCOUNTING The budget for the governmental fund is adopted on a basis consistent with generally accepted accounting principles (GAAP), except that encumbrances are included as expenditures. The General Fund expenditure classifications for GAAP and budgetary purposes may differ due to classification of expenditures. There were no encumbrances as of June 30, 2013 or June 30,

30 Other Supplementary Information

31 SCHEDULE OF WYOMING STATE ASSISTANCE YEARS ENDED JUNE 30, 2013 AND 2012 Source Grant Number Purpose Total Amount Approved Amount Drawn as of June 30, 2011 Amount Drawn During the Year Ended June 30, 2012 Amount Drawn During the Year Ended June 30, 2013 Balance Available to be Received Wyoming Office of State Lands and Investments MRG-05127Fr Leachate Control $ 175,000 $ 32,162 $ 0 $ 0 142,838 Funding expired (142,838) (142,838) Balance 0 MRG-07221Fr Sand Draw Landfill Expansion 281, ,452 23, ,148 MRG-09542Fr Recycling Equipment 157,037 Transfer from Vehicle Weigh Scales Grant 42,450 Total 199,487 92, ,932 2,732 0 MRG-11109Fr Transfer Station Upgrades 95, ,209 57,791 0 CWC-13054Fr Transfer Station Management 28, ,

32 Compliance Reports

33